NEW: MCEAA's state legislative proposals on eminent domain abuse by Vulcan's private railroad.
If it obtains a rail license from the Surface Transportation Board (STB), Vulcan has said it will condemn land along any route selected. It is Vulcan's position that a federal rail construction license can preempt any operation of state eminent domain law. Thus, even though the federal government and the STB itself would have no power of their own to condemn land without proceeding according to state eminent domain law, Vulcan believes that the federal government's decision to grant rail licenses gives it the power to tell states what their eminent domain law has to be.
Currently in Texas, only common carriers are allowed to condemn land. Vulcan's wholly owned Southwest Gulf Railroad will not be a common carrier. Should state law be cast aside, simply because a federal agency says this is a common carrier? That is Vulcan's position, and not surprisingly, STB's, because it furthers an important policy choice that the agency has made: the choice to allow real railroads to shift the cost of construction to the shipper, necessitating paper railroads like Vulcan's. But from where does the federal government derive this alleged power to define state eminent domain law? That is the real question, and it is a much closer one, especially on these facts, than Vulcan and the STB will admit.
Prior to the commencement of the STB process, numerous landowners in the Quihi area entered their land into restrictive covenants barring rail construction. These covenants do not require Vulcan to use condemnation. When and if Vulcan adequately discloses and mitigates the impacts of the quarry and the rail line, the landowners involved in these covenants may consider as a whole whether to retain them.
Any condemnation case brought by Vulcan will not proceed until the termination of any federal litigation over the license.
Finally, those following the Supreme Court's decision this past summer in Kelo v. New London, to allow states to condemn land and then transfer it to private entities at their legislative discretion, may think that a fight on this issue is foreclosed. There is also a case, BNSF v. City of Houston, from a court of appeals in Houston (which does not bind the San Antonio area), that essentially adopts the STB/Vulcan position on condemnation power. However, a closer look at those cases, and an understanding of what they are NOT about, reveals a closer case than most would think. Neither Kelo nor BNSF gives the federal government or a railroad a basis to do what Vulcan thinks it does. Further, BNSF had the opportunity to explain exactly what the basis for that power was, and could not come up with an explanation, citing instead dicta from other cases. Links to the cases are presented below for further reading.
The condemnation issue is far from definite, and will be a major battleground between the attempted exercise of federal power by a private entity and the preservation of state control over the scope of eminent domain. Property rights advocates nationwide should take note: we would welcome your assistance and support.
State Legislative Study Proposals
Between sessions, the Speaker of the Texas House of Representatives issues interim study charges to various House committees. The committees study the issues and report back to the Speaker. The committee may propose legislation in the next session based on its study.
Currently, Texas eminent domain law is not as clear as it could be in distinguishing between (1) essentially private, sole-service spur lines, where the entity that controls the "railroad" is the same entity that controls the facility to be served, and (2) true common carriers.
MCEAA has crafted a proposal that would preserve the ability of inudstrial shippers to seek build-outs and alternate rail access, and preserve the ability of true common carriers to provide that access, while remedying the eminent domain abuse that will occur with Vulcan's sole-service "paper railroad".
Many larger issues are implicated by this proposal, including the balance of federal and state power over state property law, and the balance of power between railroads and industrial shippers. Most important, however, is the balance of power between all of those entities and existing landowners and communities. MCEAA has made its proposal as narrow as possible with these factors in mind, in an effort to avoid being unfairly labeled a threat to industrial shippers seeking rail service but held captive by railroad pricing power. In fact, MCEAA's proposal will likely benefit such shippers -- some of whom, such as Vulcan, unreasonably present condemnation as "the only option" to cost effectively gain rail access -- by causing an adjustment of power between the federal and state governments and between industrial shippers and railroads. As nearly seven years of delays in Vulcan's case have shown, exercising the threat of condemnation for a sole-service spur is neither effective community relations nor sound policy. Industrial shippers need to realize that conceding this narrow ground to their communities at the state level is the only way to gain enough momentum to change the balance of power between themselves and the railroads at the federal level. Federally approved pricing power continues to hold shippers captive, but the balance of power, which has remained roughly constant for over a decade since the creation of the STB, will not be altered until shippers convert adjacent landowners and communities from enemies into allies.
On May 3, 2006, MCEAA presented its proposal to the House Committee on Land and Resource Management at their Interim Study Charge hearing.
Watch the hearing. MCEAA's portion starts about 40 minutes in and runs until about 20 minutes from the end. (Requires RealPlayer)
Texas House of Representatives Land and Resource Management Committee homepage
MCEAA's Proposal
One page summary
Full testimony
Legislative proposal (underlined)
Supplement: Texas Constitution and Relevant Statutes
Supplement: Federal STB statutes